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Government spending is a component of Aggeregate Demand along with Consumption, Investment and Net exports. A reduction in Aggeregate Demand causes firms to produce less output in order...

Water is produced and sold by the government. Demand for water is represented by the linear function Q=50-2P. The total cost function for water production is also a linear function: TC(Q) = 100 + 10Q. ...

In theory, a monopoly is a situation in which the ‘industry is the firm’ however in reality in the UK we consider anything which controls 25% or more of the market to have monopoly pow...

Income can be defined as a flow of factor incomes, such as earnings, dividends and rent.  Alternatively, wealth is a stock of financial and real assets including savin...

Under normal circumstances, when there is an increase in the money supply the interest rate should decrase because money is more abundant hence the cost of borrowing is low. In a liquidity trap the int...